Correlation Between Graphex Group and Lifezone Metals

Can any of the company-specific risk be diversified away by investing in both Graphex Group and Lifezone Metals at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Graphex Group and Lifezone Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Graphex Group Limited and Lifezone Metals Limited, you can compare the effects of market volatilities on Graphex Group and Lifezone Metals and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Graphex Group with a short position of Lifezone Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Graphex Group and Lifezone Metals.

Diversification Opportunities for Graphex Group and Lifezone Metals

0.7

Correlation Coefficient

Graphex Group  Lifezone Metals

Poor diversification

The 3 months correlation between Graphex and Lifezone is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Graphex Group Limited and Lifezone Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifezone Metals and Graphex Group is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Graphex Group Limited are associated (or correlated) with Lifezone Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifezone Metals has no effect on the direction of Graphex Group i.e., Graphex Group and Lifezone Metals go up and down completely randomly.

Pair Corralation between Graphex Group and Lifezone Metals

Given the investment horizon of 90 days Graphex Group Limited is expected to generate 2.19 times more return on investment than Lifezone Metals. However, Graphex Group is 2.19 times more volatile than Lifezone Metals Limited. It trades about -0.07 of its potential returns per unit of risk. Lifezone Metals Limited is currently generating about -0.3 per unit of risk. If you would invest  157.00  in Graphex Group Limited on January 10, 2025 and sell it today you would lose (58.00) from holding Graphex Group Limited or give up 36.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Graphex Group Limited  vs.  Lifezone Metals Limited

Graphex Group Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Graphex Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in May 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Lifezone Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Lifezone Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in May 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Graphex Group and Lifezone Metals

The main advantage of trading using opposite Graphex Group and Lifezone Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Graphex Group position performs unexpectedly, Lifezone Metals can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lifezone Metals will offset losses from the drop in Lifezone Metals' long position.

The idea behind Graphex Group Limited and Lifezone Metals Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.